Operation and Development Strategies

In 2022, CSC compiled its first 10-year (2023~2032) operation and development strategies. With the establishment of a table of future events, CSC can examine major challenges that it will face in the future and formulate strategies and specific measures to respond to them in the next decade. It has reported the results of its implementation and tracked their statuses to the Corporate Governance and Sustainability Committee semiannually and to the Board of Directors at the end of the year since 2023.

With the vision of aspiring to be an enterprise with sustainable growth that distinguishes itself with a firm commitment to smart innovation, green energy, carbon reduction, and value co-creation, CSC has formulated its operation and development strategies. Guided by this new vision, CSC has continued to enhance and optimize its production processes, product portfolios, operational models, green energy and carbon reduction, investment deployment, and corporate governance. The focus has shifted from mere quantitative changes to qualitative changes; that is, instead of pursuing more production capacity of steel, the emphasis is now on the creation of greater value in steel.

CSC's 10-year operation and development strategies encompass four main strategic goals, including finance, production of premium/advanced premium steel, green energy and environmental protection, and smart manufacturing. With the dual-core strategies for its operational development, i.e., "becoming a steel mill that produces premium products with high value" and "development in the green energy industry," 10 key strategies and various action plans have been developed. The main focuses are listed as follows:

• Becoming a steel mill that produces premium products with high value

  CSC will continuously promote the development of Advanced Premium Steel (APS) products, actively expand the sales of seam-free strip products and next-generation steels for screw heads, and promote high-recyclability steel for computer casings and self-adhesive coated electromagnetic steel sheet applications. CSC will continue to cultivate potential APS products and improve manufacturing processes to enhance the gross margin of quasi-APS products.

  01
• Development in the green energy industry

  Focusing on solar photovoltaic and offshore wind power as key projects:
  
  Solar photovoltaic:
  Continuously expand rooftop solar photovoltaic projects, with the overall target installation capacity exceeding 120MW. In addition to enhancing power generation efficiency and operation and maintenance technology, CSC plans to gradually enter into the application field of energy storage systems, power auxiliary services, and other green energy-related projects.
  
  Offshore wind power:
  The Zhong Neng offshore wind project will be connected to the grid by the end of 2024. The projected annual electricity generation is approximately 1.1 billion kilowatt-hours over the coming years, with a carbon reduction potential of 550,000 tons per year.

  02
• Digital transformation

  CSC is fully committed to promoting smart manufacturing. CSC will establish nine major 5G AIoT platforms, integrate data from various production lines, deploy intelligent models, and provide a unified interface for data query and model management.

  03
• Low-carbon transformation

  CSC has concrete actions planned for short, medium, and long-term phases to fulfill our carbon reduction commitments. In the short term, efforts will be focused on intensifying energy efficiency improvements and using renewable energy as the primary carbon reduction measures to achieve the short-term 7% carbon reduction target. For the medium term, plans include implementing four major strategies: hydrogen injection in blast furnaces to replace coal, adding reduced iron to blast furnaces, increasing the use of steel scrap, and co-production of steel and petrochemicals, aiming to achieve the medium-term 25% carbon reduction target. Long-term carbon reduction plans involve promoting CCS (carbon capture and storage) technology and adopting fully hydrogen-based smelting processes, aiming to continuously optimize the core capabilities of CSC to achieve carbon neutrality by 2050.

  04
• Supply chain transformation

  Based on the strategy of extending sales channels, CSC will adjust the production and distribution layout to seize opportunities in supply chain transformation. Additionally, by participating in the early stages of customer’s product design, CSC will proactively influence the determination of customer’s material specifications to gain early access to supplier opportunities.

  05